Intermediate Accounting: E9-8 On September 22, 2011, a flood destroyed the entire merchandise

Intermediate Accounting
E 9-8 Gross profit method
On September 22, 2011, a flood destroyed the entire merchandise inventory on hand in a warehouse owned by the Rocklin Sporting Goods Company. The following information is available from the records of the company's periodic inventory system:
Inventory, January 1, 2011 140,000
Net purchases,January 1 through September 22 370,000
Net sales, January 1 through September 22 550,000
Gross Profit Ratio 25%

Required:
Estimate the cost of inventory destroyed in the flood using the gross profit method.
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